SPECIALIST TRUSTS LAWYERS

Setting up Trusts in Singapore


Though you can never predict the future, you can plan for it. Maybe you have heard about trusts and believe only the wealthy need them. Trusts are important for anyone who wishes to ease the difficulty of a loved one’s passing.

 

A trust streamlines the burdensome task of estate administration for your relatives when they need simplicity most.

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Set up a Trust from S$2500 Nett.

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What is a trust?

A trust is a legal arrangement in which a trustee is assigned to hold and manage assets for the benefit of beneficiaries. As fiduciary for the beneficiaries, the trustee holds legal title to trust property and assets, handling them according to the trust terms, for example, investing, distributing, and paying taxes on income and capital.

A trust is also an estate planning tool to organize, transfer, and protect your property. The three main parties to a trust are the settlors, trustees, and beneficiaries. Each of these three parties may be one person or several people.

WHAT YOU NEED TO KNOW

About Setting up Trusts


Benefits of a trust 

Why set up a trust? A trust is used for many reasons:

Family Trust

Family trusts, also known as family trust funds, are created to protect your assets and to benefit your family beyond your lifetime. When your assets are held in a family trust, you no longer have legal ownership of them as they are held by the trustees for your family’s benefit.

Typically, people would set up a family trust to get some benefit from not having personal ownership over their assets. A family trust can be used to:

  • Set aside money for minor children, or for special reasons such as your child or grandchild’s education
  • Protect your assets against creditors and unwanted claims (e.g. from a former partner or business creditors)
  • Ensure that your assets pass on to your children and not their spouse

Special Needs Trust

A special needs trust is one that is set up to benefit a child, spouse, or family member with special needs, to ensure that they will be able to receive and use the money and assets you leave behind for them in the way that you intend.

Setting up an irrevocable trust for someone with mental incapacity or physical disabilities has the following benefits:

  • assets and money held in the trust is protected from creditor claims
  • the beneficiary of the trust can be assured that the financial assets will not be affected by the settlor’s financial situation

Charitable Trust

A charitable trust can be set up in Singapore if you wish to set aside some of your assets or income for charitable causes. Here are some benefits of creating a charitable trust:

  • your assets and funds can be distributed in a structured manner
  • automatic tax exemption benefits on the trust

Depending on their intentions, a settlor may create a revocable living trust, an irrevocable living trust, or a testamentary trust. In a living trust, a settlor transfers their assets to the trust, either with or without the right to terminate or amend the trust. The testamentary trust is created within a will, which takes effect after the settlor’s death. 

Difference between a will and a living trust

Why choose a living trust fund vs will? Not only are trusts more versatile for complex estate plans, but, more beneficiaries and pay off debts upon the settlor’s death. Unlike wills, moreover, living trusts take effect while you’re alive, so you can see your estate planning at work. 

man seated on a chair thinking whether to set up a trust

Should you set up a trust?

Trusts have many purposes to fit diverse circumstances, from complex multi-generational wealth protection to philanthropic gifts to charities.

 

A trust may allow the trustee greater or lesser discretion in distributing trust income and capital to beneficiaries, whether the beneficiaries are spouses, children, business entities, employees, charities, special needs children, non-residents or the settlors themselves.

 

Some trusts have mixed purposes to achieve multiple aims. Unlike wills, you have practically limitless options on how a trust can be used.

How to set up a living trust

To set up a trust in Singapore, you need to prepare a document that satisfies specific legal formalities:

 

  • certainty of intention to create a trust,
  • certainty of the property of the trust, and
  • certainty of the beneficiaries.

 

In other words, you need a document that declares your intention to transfer specific assets to named legally eligible beneficiaries to be held by a named trustee.

 

The document must contain this definite language to conform to trust law, and you must be legally and mentally capable of creating the trust.

Do you need a lawyer to set up a trust?

Since trusts can be rather complex, it’s best to hire an experienced estate planning attorney to help you accurately express your wishes in a legally viable trust.

 

Here at Kith & Kin Law we offer transparent fees and setting up trusts starts from S$2500 nett.

OUR PROCESS

How we can help you


Everyone has their own unique legacy they wish to leave behind. Through our purpose-driven ethos, we will help you craft out a personalised plan on how you wish to incorporate your legacy plan with your estate plan. 

Sign up for a consultation

The process starts with a paid consultation of 60 minutes for S$175.

Schedule a meeting

Meetings can be in-person or over ZOOM.

Creation of an Action Plan

Based on what has been agreed upon during the meeting, we shall start the process in fulfilling your legal requirements.

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Trusts FAQ


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Here are some commonly asked questions about Trusts. Should you have specific requirements or questions, please get in touch with us and we would be happy to assist you.

Do I need a trust if I already have a will?

Both wills and trusts will transfer your assets to your beneficiaries after your passing. However, wills must go through probate, an often lengthy and expensive public court process, while trusts do not. Your estate remains private with a trust. Moreover, a trust is more versatile for complex estates and property passes while you are alive.

Can I change the terms of my trusts at any time?

Revocable trusts can be amended or terminated at any time. Irrevocable trusts transfer all ownership rights, legal and equitable, to the trustee, so cannot be amended without consent of all the beneficiaries.

Do I still have control over my assets if I have a trust?

Depending on the terms and type of trust, you may control your assets in a revocable trust. However, you lose control over your assets in an irrevocable trust and are subject to the terms of the trust.

Can a trustee be a beneficiary?

One person can be settlor, trustee and beneficiary, but only if there are other beneficiaries. For example, a husband and wife create a trust as settlors, manage the trust and receive the income and capital of their trust assets during their lifetime.

Their children are also named beneficiaries who receive trust assets upon their parents’ death. In this case, the trustees are beneficiaries during their lifetime.

Can an executor and trustee be the same person?

Yes, both can be the same person.

Can a trustee remove a beneficiary from a trust?

If the trustee is also the settlor of a revocable trust, they can amend the trust in their capacity as settlor.

How do I change trustees in a trust?

The settlors may change the trustee by amending a revocable trust. If a Protector has been assigned, a protector may remove a trustee. Otherwise, you can petition a court to change the trustee.

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